Harvey responds to Rousey ruling

April 5, 2014

Darin Harvey issued a statement on the California State Athletic Commission (CSAC) ruling which released his former client, Ronda Rousey from her fight contract.   MMA Payout has obtained the decision siding in favor of the UFC women’s bantamweight champion and we take a look at what went wrong.

Via Inside MMA on AXS TV:

“When I first met Ronda Rousey four years ago, she was destitute and UFC President Dana White was quoted as saying a woman would never fight in the UFC. I set out to make Ronda a star and prove Dana wrong. The results speak for themselves. Ronda is now a highly sought-after model, spokesperson and actress, not to mention the first and still reigning female UFC champion. She deserves all the credit in the world for her accomplishments, but she never would have achieved such unprecedented success without the unwavering financial investment, career guidance and professional support Fight Tribe Management and I provided her.

I am not a litigious person, but I never thought for a moment that once she made it to the top, Ronda would turn her back on us and refuse to honor her legal and moral obligations. After months of radio silence and without even giving me the courtesy of an explanation I was forced to go to court to compel Ronda to private arbitration per the terms of our agreement. Before that could be sorted out, Ronda’s legal team ran to the State Athletic Commission, demanded an expedited hearing and tried to get our entire agreement thrown out on a technicality. During our four-hour hearing last week, I finally heard Ronda’s side of the story. Frankly, it’s pathetic and I’m not surprised the Commission chose not to include any of that in their written decision. The Commission did properly reject Ronda’s attempt to invalidate the entirety of our agreement, and I am very pleased with that aspect of their decision. Our case against Ronda will now proceed. I am confident that when all the facts are presented to an impartial private arbitrator, Fight Tribe Management’s contributions to Ronda’s career will be fully recognized and fairly rewarded.”

Harvey also tweeted the following:


Roy Englebrecht, a fight promoter in California, empathized with Harvey’s plight but also advised the following:

I have seen this happen a number of times over the years, where well intentioned people want to get involved in the fight business, but never take the time to learn about the business and some of the rules that govern it. This situation with Rhonda and Darin could have been avoided if Darin knew the CSAC rules and followed them. This manager/fighter agreement or promoter/fighter agreement in California is unique to the sport, and if not followed you will lose, as this ruling showed.

The comments are based on the ruling issued by Andy Foster of the CSAC in which it determined that the evidence and testimony at the March 28th Arbitration showed that the “Service Agreement” (as identified in the CSAC Arbitration Decision) was void as to the professional fighting services only.

The ruling, in favor of Rousey, is premised on Harvey not properly executing the fight contract on “printed forms approved by the commission.”  The Commission ruled that, “[t]he controlling contract was the subject “Representation Agreement”, which was entered into in California and specifically binds the parties to be governed by California law.” Hence, the rationale by the Commission would lead it to conclude that since the contract was not on its printed forms, the contract was void as to the fighting portion of the contract.  In addition, the Commission ruled that “a fighter-contract” is not valid unless both parties appear at the same time before the Commission, and the contract receives the Commission’s written approval.”  This did not happen as the contract, which was originally drafted in May 2012, was not executed until January 2013.  Regardless, it was not done before the Commission.

Even though Harvey’s “Representation Agreement” did not comply with the Commission rules, he still argued that he was entitled to “quantum meruit” (latin for “what one has earned”).  This is a theory in contract law allowing a party to be compensated for actual work/services performed.

Under this theory, Harvey was seeking to recoup losses incurred from representing Rousey.  Harvey indicated in an exhibit at arbitration that from January 1, 2010 to January 31, 2014, he collected $25,608 in income from Rousey fights, $23,180 from PPV fights and $20,830 from income of sponsorships.  This is offset by Harvey’s claim that he paid $170,376 in expenses related to Rousey’s fighting career which makes Harvey at a loss of $85,818 from representing Rousey.  The paid expenses included paying for training including strength and conditioning, sparring partners and living expenses.

However, the Commission ruled that Harvey was not entitled to quantum meruit since “such a finding would be inconsistent with the provisions of California law requiring proper fighter-manager contracts…”   The Commission reasoned in its decition, “[i]f Harvey, or other managers, were allowed to recover by means of quantum meruiti, it would undermine the statutory authority purposes of the Boxing Act.”  Thus, the Commission ruled against Harvey based on the overarching policy that it must protect the fighters from manager graft.  As stated in the decision, “[t]he Boxing Act is a regulatory statute, and recovery on a quantum meruit theory in the absence of compliance with the act would be inconsistent with its regulatory purposes.”

Payout Perspective:

As we indicated in a previous post, expect this case to heat up in the anticipated lawsuit and/or private arbitration.  However, this situation may have been avoided if Harvey and Rousey entered into a fight agreement as dictated by the rules of the CSAC.  If there would be further representation in other matters outside of fighting, it would seem that a second representation agreement would be necessary.  Based upon the facts, it looks as though the fighter-manager relationship was informal at the beginning with no need for things such as a signed contract.  This may explain the long lag between the date of the Representation Agreement (May 15, 2012) and the date Rousey actually signed it (January 29, 2013).  The harshness here is that for not following the rules of the CSAC, Harvey lost over $85,000 spent on her client that he will not be able to recoup.  The moral here is to follow the rules.

U.S. Supreme Court denies review of Mayweather copyright case

April 4, 2014

This past week, the U.S. Supreme Court denied review of a copyright infringement lawsuit from a musician that claimed that Floyd Mayweather, Jr. used a version of his song without his permission at Wrestlemania 24.

By denying musician Anthony Dash’s request for the Court to review his claims, it upholds a ruling that the musician was not able to prove he suffered monetary losses when Mayweather used a version of his song for his entrance music at Wrestlemania 24 in 2008.

The background facts of this case are interesting as Mayweather signed on to do a match at the WWE’s biggest event of the year.  It’s fairly common for celebrity guests to make appearances at this event. The contract Mayweather signed with the WWE did not include specifics on what entrance music Mayweather would use.  The WWE had communicated to Mayweather that it had selected a 50 Cent song for his entrance. But, the night before the event Mayweather’s manager told the WWE he would enter using another song and represented to the WWE that they had rights to it and granted the WWE the right to use it during his appearance.  The entrance music played for 3 minutes as Mayweather came in for his match against The Big Show.

Mayweather used the entrance music at one more WWE event.

Dash claimed that the entrance music played by Mayweather contained his copyrighted instrumental music over lyrics.  While he claimed that in 2005 he created the instrumental of the song, he did not file a federal copyright for it until 2009.

The court held that Dash could not prove actual and profit damages claims stemming from the use of his work for entrance music.  Specifically, the court was not impressed with the report produced by Dash’s expert claiming that he was entitled to $1,019,226 in actual and profit damages for the infringement at Wrestlemania alone.

(H/t: Law360.c0m)

Payout Take:  The crux of the issue centered on whether the musician could prove damages as a result of the infringement.  The report provided by his side appears overblown by just looking at the amount claimed.  I am half-joking when I write that the U.S. Supreme Court timed the issuance of this denial of review during “Wrestlemania Week.”  The underlying facts of the case are amusing considering the change in entrance music and the subsequent request for over $1 million for 3 minutes of playing a song of a relative unknown musician. With the U.S. Supreme Court finding in his favor, The Money Team gets another win.

CSAC rules Rousey released from fight contract

April 4, 2014

Sherdog’s Mike Whitman first reported that the California State Athletic Commission issued its ruling in the arbitration of Ronda Rousey and Fight Tribe Management.  The commission ruled that Rousey is released from her fight contract but left the commercial aspect of the contract to the court.

Executive Director of the CSAC, Andy Foster heard the arbitration between the parties last week over the dispute between the UFC women’s bantamweight champion and her manager Darin Harvey.  Originally, Harvey had petitioned the Los Angeles Superior Court for the issue regarding the representation agreement between the parties to be decided via arbitration.  However Rousey’s legal representatives claimed that the contract should be determined by the CSAC.  The arbitration was held on March 28 with Foster serving as the arbitrator with the assistance of two attorneys from the AGs office.

Harvey claimed that the representation agreement was drafted as a talent contract and not a fighter-manager contract.  Regardless, Rousey’s attorneys argued that the representation agreement was void under California law.

The facts stated that Rousey and Harvey entered into a 3 year agreement starting on May 15, 2012 and signed on January 29, 2013.  Harvey would receive 10% of Rousey’s income generated from professional fighting, modeling, acting and other commercial activities.  However, the CSAC determined that the agreement “was not prepared on the required, pre-approved forms, nor did both parties appear before the commission at the same time in order to receive the commission’s approval, thereby invalidating the agreement as a fighter-manager contract in California.” (quote via Sherdog)  The CSAC ruled that Harvey was not a “manager” as defined under Business and Professions Code section 18628

The CSAC left open the issue as to the “commercial activities” that were incidental to “fighting activities” to the court.  So, it’s likely that we have not heard the last of this dispute.

Payout Perspective:

MMA Payout will have more on this decision as it becomes available.  The initial read from Sherdog’s report reflects the fact that this contract dispute is not over.  It’s interesting to note  that based on the information available, Harvey sought his manager fee from “commercial activities” which may have been a conflict with Rousey’s agents at William Morris. We note that Rousey signed Fight Tribe’s agreement on January 29, 2013 and then signed on with William Morris in late February 2013.  Whether this was coordinated by Harvey and/or the relationship between Fight Tribe and William Morris became strained over time is an issue that may play out in court proceedings.

WWE denied motion to stop sellers of counterfeit merchandise

April 3, 2014

According to the Hollywood Reporter, the U.S. District Court for the Eastern District of Louisiana denied the WWE’s request for a temporary restraining order granting the sports and entertainment company the opportunity to protect it from anticipated bootleggers that will sell unauthorized and infringing merchandise at Wrestlemania, the biggest weekend in the company’s year.

Judge Helen Berrigan issued the ruling which reasoned that since the WWE could not name the potential infringers (the lawsuit was filed against John Does) or at least provide some information, it could not grant the WWE the authority as a “judicial imprimatur” to determine “when and from whom seizure (of alleged infringing goods) is appropriate.”

The WWE requested, like other leagues and touring music acts have done in the past, for a Court order granting it the ability to stop and seize unauthorized vendors selling unlicensed merchandise which infringes on one’s licensed trademarks.  Many fans of the WWE are in New Orleans for the 30th edition of the WWE’s Super Bowl.  It’s the biggest event of the year for the company and its expected that there will be bootleggers selling counterfeit WWE goods.

While Judge Berrigan sympathized with the WWE and acknowledged the unenviable position it was in as a company which knows a wrong will happen but cannot tell the Court anything more than this, the Court could not grant it the relief it sought.

Judge Berrigan certified her ruling for interlocutory appeal which is an appeal of a ruling by a trial court that is made before the resolution of the claims.  According to the THR article, the WWE has filed a motion for reconsideration.  But, this motion will likely be heard by Judge Berrigan once again and unless there is something that was not brought up in the original WWE motion, it’s unlikely to succeed.

So, the WWE may still file the interlocutory appeal but this would have to happen now (the rules state it has 10 days but since Wrestlemania occurs this Sunday it’s now or never.)

Payout Perspective:

The overarching legal issue is that the Court would not grant the WWE the right to enforce its trademark by allowing it the right to go around and stop non-licensed vendors and confiscate their merchandise.  This was due the fact that it could not specify or identify the potential bootleggers.  To give an example of how much may be lost; investigators on behalf of the NFL seized $21.6 million in counterfeit NFL merchandise at this year’s Super Bowl.  The WWE claimed that their merchandise sales are “expected to be at least $19 million” per THR.  The WWE is not the NFL but this should give one a snapshot of how much may be at stake.  We will see what legal move the WWE does next but this ruling may be of concern for other big events where opportunists will try to make money selling counterfeit merchandise.

Recent Court ruling may impact Zuffa anti-piracy litigation

March 30, 2014

A recent federal court ruling could pose a problem for Zuffa in its legal strategy to go after end users that steal its pay per views.  A federal judge in a Florida court has thrown out a lawsuit by adult film company Malibu Media due to lack of jurisdiction.

Malibu Media sues hundreds of people claiming that they have illegally downloaded its product. It employs a strategy of finding the alleged illegal users through tracking of individuals’ IP addresses.  Essentially, it files lawsuits all over the country in venues where it has tracked down where the alleged infringer is living.  But, the basis for the filing of the lawsuit is premised upon its location of the plaintiff via IP address.  Malibu argued that the reliability that the plaintiff is located in the venue where the lawsuit is filed is reliable due to the time of the use and the location of the address.  The IP addresses were obtained from Comcast Cable.  However, the Court, on its own accord, determined that Malibu Media must show good cause why the Court should rely on its geolocation of the defendants (alleged infringers). Notably, Malibu Media had sued the individuals as “John Doe” with only an IP address to identify the individual.

Based on the IP address would Malibu Media then request that it obtain the name of the individual with the account that is linked with the IP address.   The Court ruled that Malibu Media could not provide sufficient evidence for the Court to rely on to show that the actual infringer of the company’s copyright.  Thus, without the alleged infringer providing a response, the Court threw out the lawsuit.

Zuffa has taken down web sites illegally streaming UFC PPVs and has obtained user information such as usernames and IP addresses in order to track down the individuals for possible lawsuits.

Payout Perspective:

Even before evaluating the merits of the lawsuit, the party filing suit must establish that it is in the correct jurisdiction.  The Malibu Media ruling in Florida may be either an isolated or persuasive ruling for other venues to follow suit.  In general, in order for Zuffa to sue in a particular court, the person it must sue must reside in that district.  The viewership of the illegal stream must occur in the place where it happened.  But, the ruling states that despite the location of the IP address, Malibu Media could not establish the actual person that is purportedly watching the illegal stream.

Zuffa indicated that more than 50% of the individuals targeted for allegedly illegal streaming UFC events settle out of court according to MMA Junkie. And while the issue that it loses millions of dollars from illegal streaming is a reality, the legal procedure that it seeks to recoup its losses may be taken into question.  While Zuffa has been able to shut down illegal streaming sites and have gone after end users which has resulted in either out of court settlements or default judgments, the Malibu Media ruling in Florida may be an impediment to suing claimed infringers.  If a Court does not rely on an IP address to establish the jurisdiction of the claim, then it becomes harder to sue.

Rousey-Fight Tribe arbitrate dispute

March 28, 2014

MMA Junkie reports that Ronda Rousey and her estranged management group, Fight Tribe Management, are in an arbitration hearing today (Friday) before the California State Athletic Commission to determine the validity of Fight Tribe’s representation agreement with the UFC bantamweight champion.

Two weeks ago, Fight Tribe Management filed a petition for arbitration in Los Angeles Superior Court to determine the validity of the representation agreement.  Under California Business and Professions Code §18640 CSAC has the “sole direction, management, control of and jurisdiction” of mixed martial arts and can hear disputes such as these.

According to the Junkie article, Foster, along with assistance from the California attorney general, will review the briefing submitted by both parties, hear testimony from witnesses at the arbitration hearing and render a decision.

There appears to be a dispute on the validity of the contract and it’s not clear whether the CSAC ruling will end this dispute.

In its filing with the Court on March 7th, Fight Tribe indicated that it wanted the issues concerning the dispute confidential based on the terms of the contract entered into by Rousey and Fight Tribe.

Payout Perspective:

From its initial filing on March 7th, the disputed contract issue has not been made public although the commission’s decision will be public record.  So, it may be that we will not hear about the contractual issues in dispute until the CSAC renders its opinion sometime next week.  Even with the CSAC decision, the legal wrangling behind this dispute may not be over.  MMA Payout will keep you posted.

An update on Zuffa-NY lawsuit and 3 proposed bills re MMA in Albany

February 27, 2014

Zuffa and lawyers for the Attorney General of New York have filed an amended discovery plan which looks to depose certain individuals as it relates to Zuffa’s lawsuit against New York.  In addition, Lohud.com reports on the latest happenings with the future of professional MMA in New York.

Notably, the Lohud.com article reports on three major bills which addresses the regulation of MMA in the state.

One bill would allow professional bouts in the state.  Another bill would lift the ban only if an injury fund for fighters is set up and another would put a moratorium of two years on all MMA matches.

The article quotes a representative from the National Organization of Women stating that it would continue to oppose the legalization of professional MMA in the state.  Women groups have expressed concern over the messaging and violence of the sport.  Examples of their concern include recent statements by Dana White where he used the word “pussification” and actions by UFC fighter at the time Thiago Silva which included alleged violence toward his estranged wife.

And, of course, labor unions were mentioned as an obstacle for Zuffa in the state.

Of the three proposed bills that will be introduced this spring is one that would put a halt to MMA in the state (including amateur bouts) until a study on the health impacts of MMA will be performed.  I would assume that this would come out of a part of the state budget.  The other bill allowing MMA in the state with conditions has promoters coming up with a “compensation fund for injured fighters.”  It would also create a presumption that “any neurological later discovered in a fighter were caused by their participation in MMA.” (via Lohud.com).

There are inherent problems with the two bills that would presumably allow MMA in the state with certain conditions.

Payout Perspective:

As we’ve written year after year, hope springs eternal for professional MMA in Albany.  This time around we are presented with some interesting proposals which we will track.  Obviously, there is only one of the three bills listed that Zuffa would be interested in supporting.  From the public relations perspective, the Thiago Silva situation is bad PR for the UFC but realistically, like all sports leagues (e.g. Raymond Felton), it’s hard to avoid.  Moreover, the UFC was quick to act in dismissing Silva.  But, it supports anti-MMA advocates as recent examples of its position.  White’s comments reflect the good and bad of having a promoter speak from the hip.  He is going to say what he means without a filter but that is not always good for business.  We can only surmise that White did not think that his comments could be seen as derogatory towards women, otherwise he would not have said it.  But, that’s the problem.

Regarding the lawsuit, the discovery phase will be complete by April 25, 2014.  At this point, New York has identified three individuals that it will depose.  Zuffa has identified “persons most knowledgeable” at the AG of the State of New York, the New York State Liquor Authority, the New York State Athletic Commission and the New York State Department of State as well as Melvina Lathan.  She is a former boxing judge and chairperson to the NY State Athletic Commission.  Here is a 2010 article on her from the NY Times in which she wanted the state to legalize MMA.

MMA Payout will continue to keep you posted of the lawsuit as well as the political maneuvering in Albany.

Nike files lawsuit over Venum name

February 19, 2014

The Beaverton, Oregon based sports gear maker Nike filed a lawsuit against MMA sportswear brand Venum last month alleging trademark infringement and other violations of trademark law.  The lawsuit filed in the U.S. District Court of Oregon claims that Venum’s mark infringes a previously filed Nike-owned trademark, Venom.

Nike sued DBV Distribution, Inc. and Dragon Bleu, Sarl (“Dragon Bleu”), the owner of Venum, in early January stemming from the MMA brand’s use of the “Venum” trademark.  The Complaint claims that Nike has owned the “Venom” trademark since 2002.  The mark, according to the Beaverton, Oregon company, has been used in connection with athletic apparel and equipment since at least 2002.  It has depictions of the purported infringement included in the Complaint including a bat, bat bag and apparel which is associated with Kobe Bryant shirts, shorts and warm-ups.  It also includes “Venom” women’s sportswear.

Nike claims that the “unlawful activity” stemmed from Venum selling athletic apparel and equipment on its Venum web site and also http://www.dragonbleu.fr.  Nike alleges that Venum “intentionally attempt to draw associations.”  One of its arguments is that Venum offered Nike boxing shoes on its Dragon Bleu web site.

The lawsuit filed in Oregon District Court also brings up that the U.S. Trademark Office initially refused registration of the “Venum” mark due to the “Venom” trademark.  Dragon Bleu argued that there is no “likelihood of confusion.”  At the time, the “Venom” mark was in connection with “ski and snowboard gear” whereas “Venum” related to MMA sportswear thus the assertion was there could be no confusion.  To buttress its argument, it cited that other “Venom” marks were allowed which related to sporting goods but were readily distinguishable due to the fact that they were associated with different sports.  The Trademark Office agreed and granted it the “Venum” mark.

The legal quarrels may have begun due to Dragon Bleu suing Nike in France in November 2013 seeking a preliminary injunction for an alleged infringement by the swoosh for a soccer boot it called, “Hypervenom.”  This was brought up by Nike in its Complaint against Dragon Bleu.  Nike claimed that in that lawsuit, Venum argued that the Venum mark and the “Hypervenom” mark were “practically identical and that consumers are likely to be confused by Nike’s use of Hypervenom.’”  Nike asserts that its Hypervenum trademark and Venum trademark can “co-exist in Europe without any likelihood of confusion.”

Nike argues that Venum cannot have it both ways in opposing Nike’s Hypervenom soccer boot infringes its brand but then “argue their use of VENUM on apparel and equipment for mixed martial arts and related sports in the United States does not infringe Nike’s VENOM marks in the United States.”

Nike is requesting that the Court ordering the Cancellation of the Venum trademark and destruction of all infringing products.

Venum’s counsel filed its Answer to Nike’s Complaint on February 10, 2013.  Notably, Venum admits that it sold authentic Nike products on its Dragon Bleu web site.  Aside from this admission, the answer was standard.

As a sidenote, Venum’s counsel previously served as in-house at Adidas.  No correlation or insinuation here, just an interesting tidbit.

(H/t: MMA Mania)

Payout Perspective:

While it may be a viable assertion to believe that Nike’s lawsuit is a way to get Venum out of the UFC marketplace just in time for UFC uniforms, I would contend that this is not the reason.

As explained here, it’s likely that Nike would like to market its “Hypervenom” brand of soccer boot.  With the World Cup happening this June, it would behoove Nike to market these shoes before, during and immediately after the event in Brazil.  If it could broker a settlement with Venum for use of the “Hypervenom” mark in Europe, it’s likely that this lawsuit goes away.

The one big issue question that I had was why did Dragon Bleu sell Nike gear on its web site?  If we assume it received this from a Nike supplier one would think Nike would eventually find this out.  Knowing that Nike had a filed for the “Venom” mark prior to its filing, and had to respond to an office action regarding the “Venum” mark it should have been put on notice of possible issues.  Of course, filing a lawsuit against Nike last November may have drawn Nike’s ire as well.

We shall see whether this lawsuit goes away as quickly as it came.  MMA Payout will keep you posted.

UFC shuts down illegal streaming web site

February 12, 2014

The UFC announced that it had successfully taken and down and seized the records of a web site that illegally streamed two PPVs.  Also, it has made good on its threat of pursuing individuals accessing these illegally streaming sites.

The UFC has seized the records of www.cagewatcher.eu and it appears that the UFC will use this information to go after its users.

Via UFC web site:

UFC has obtained details of the streaming site’s userbase, including email addresses, IP addresses, user names and information pertaining to individuals who watched pirated UFC events including UFC 169. Also recovered were chat transcripts from the website.

In related news, there has been one instance where Zuffa has successfully obtained a judgment against an individual utilizing www.greenfeedz.com, a web site that provides illegal streaming of copyrighted content.  The individual did not respond to Zuffa’s lawsuit against him and a default judgment was entered in against him.  The individual viewed two PPVs without paying his ISP – Time Warner.  According to the legal order, he was assessed $6K in damages for copyright violations and $5,948 in attorney fees. The individual was discovered via his IP address at Time Warner.  We had previously reported that the UFC had obtained Greenfeedz user information. and this may be the result.

Payout Perspective:

It should be noted that the UFC did not prevail on the merits of its lawsuit against the Greenfeedz user.  It prevailed due to the individual’s failure to respond to the lawsuit.  Even though the individual has a judgment against him for over $11K, it will be up to Zuffa to decide whether or not to go after him for the money.  Regardless, the new information that the UFC has obtained more records from another illegal web site may give pause for those that pirate PPVs.  Certainly, individuals do not want to be sued and be subject to potential fines.  Will this be a deterrent for pirates?  So far, it has not stopped individuals but if the UFC continues to go after end users it may deter a portion of the existing base of people accessing illegal streaming.  The issue with this strategy is would suing these people alienate the fan base.  Of course, the easy UFC response is that the people not paying for UFC content are not really fans.

How does Court ruling on “Net Neutrality” relate to the WWE Network and UFC Fight Pass?

January 14, 2014

A District of Columbia Circuit Court ruled that the Federal Communications Commission (FCC) could not prohibit internet providers from blocking or discriminating against traffic to lawful websites.   The ruling which impacts “Open Internet” (aka net neutrality) may mean issues for the UFC Fight Pass and WWE Network in the future.

In Verizon v. Federal Communications Commission, the Court held that the FCC is not able to impose “anti-discrimination” and “anti-blocking” rules on Internet providers.  The Court ruled that, “…even though the Commission has general authority to regulate…it may not impose a requirement that contravenes express statutory mandates.  Given that the [Federal Communications] Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.”

CNET breaks down the ruling:

In plain English, the court rejected Verizon’s argument that the FCC had overstepped its authority to regulate broadband access, instead acknowledging that the FCC has general authority to impose regulations on broadband and wireless service providers. But because the services these providers offer are classified differently from traditional telecommunication services, the justices reasoned in their decision that they are not subject to the same statutes, which guide the agency in forming its regulatory policies.

The general theory of “Net Neutrality” regulation is to keep a public right of way to access certain services.  As stated in the CNET article, for the internet, it means that the infrastructure used to deliver web pages, video and audio-streaming services is open to anyone accessing or delivering the content.  It would thus be illegal for an ISP to block a competitor’s internet traffic simply because they are competitors.  With the Court ruling, it would seem to imply that blocking competitors may be an option.

If you are a proponent of “net neutrality” what may happen as a result was recognized by the Court in its opinion:

“…broadband providers might prevent their end-user subscribers from accessing certain edge providers (those providing content (i.e. UFC and WWE)) altogether, or might degrade the quality of their end-user subscribers’ access to certain edge providers, either as a means of favoring their own competing content or services or to enable them to collect fees from certain edge providers.”

There was no immediate word whether there would be an appeal of this decision.

Payout Perspective:

So what does this mean from a combat sports perspective?  With the UFC Fight Pass and WWE Network relying heavily and essentially depending on internet streaming services in order for its services to be viable, we could see internet providers being able to regulate the bandwidth and streaming of these services.  ISP providers may affect UFC and WWE subscribers as identified in the Court opinion.  The UFC and WWE might have to “play ball” with these ISP providers in order to obtain the best access to the end-user.

With the ruling occurring today, it’s still too early to know what may happen but MMA Payout will keep you posted.

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